UK Politics

Cameron rebuffs Miliband economy 'complacency' attack

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Media captionEd Miliband told David Cameron people were "fed up with his excuses" as they clashed during PMQs.

Labour leader Ed Miliband has said the government's policies are "failing the country" - as figures show the economy shrunk in the last quarter of 2011.

Mr Miliband used the GDP figures to accuse PM David Cameron and Chancellor George Osborne of "smug complacency".

Figures suggest UK economic activity shrank by 0.2% in those three months.

The PM said it was disappointing but the economy grew overall in 2011. He said Labour had left "the biggest boom and biggest bust" when it lost power.

Opposition leader Mr Miliband used the latest figures from the Office for National Statistics to again attack the government on its record on economic growth.

The preliminary estimate from the ONS show GDP shrank by 0.2% between October and December 2011 compared with the previous three months.

'Extremely difficult'

The figures also show the economy grew by 0.9% during 2011 - in line with what Mr Osborne said in his Autumn Statement, when he revised down a previous prediction that it would grow by 1.7%.

Last week another set of ONS figures showed that UK unemployment had risen to 2.69m in the three months to November - while the unemployment rate rose to 8.4%, the highest since January 1996.

At prime minister's questions, Mr Miliband asked what had "gone wrong" with Mr Cameron's economic plan - as the figures showed the economy was "shrinking".

But Mr Cameron said these were "extremely difficult economic times" and while the figures were "disappointing" they were "not unexpected" - as the Office for Budget Responsibility had forecast there would be a decline in growth for the last quarter.

He said the government was having to deal with the "overhang of debt and deficit" from the previous government, high fuel and food prices that had put the squeeze on people's pockets and the eurozone crisis.

The most important thing was to have a "credible plan to get on top of the deficit", he said - accusing Labour of having "only one answer. That is to deal with the debt crisis by borrowing more and adding to debt". He said that would "wreck our interest rates" and "wreck our economy", he said.

But Mr Miliband said people were "fed up" with the prime minister's excuses - and suggested the government's whole approach was characterised by "total arrogance".

"We have a shrinking economy and the highest unemployment in 18 years. How bad do things have to get in our economy to shake him out of his complacency?"

He said the government had promised unemployment would fall and the economy would grow - but they had not: "It's his policies that are failing our country," the Labour leader said.

Listing a series of initiatives aimed at boosting employment and the economy, such as cutting corporation tax and introducing enterprise zones, Mr Cameron said there was not "one ounce of complacency" in the government's approach.

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